Jack Stack’s $100 Million Plan

According to Hollywood lore, Alfred Hitchcock essentially finished his movies before he ever stepped on set to film them. He put so much energy into the planning process—dissecting the script, perfecting the storyboard and plotting every camera angle—that by the time he started filming, the movie already existed in his head. As long as he’d planned properly, if he’d identified the problems and figured out how to manage them, filming was a straightforward matter of executing his vision.

This is a little like the vibe you get when you talk to Jack Stack about the $100 million plan his company, SRC Holdings Corp., is working toward. It’s a splashy number—$100 million—and it grabs your attention. But Stack really gets excited when he talks about why and how the plan came to be. It all started, he says, because SRC spotted a looming problem: a worker shortage, and he’s not just talking about the shortage that’s currently stressing C-suites. He’s talking about something even bigger in 2030.

“The biggest problem with 2030 is baby boomers will be sidelined. We’ll all be out,” he says. New workers from subsequent generations will continue to enter the labor force, but there aren’t enough of them to replace the people who are retiring. So, Stack says: “You’ll have 71 million people sucking down healthcare, social costs, social security. That is very troublesome for us, and we don’t see anything being done about it now.”

As a result, he predicts a labor market with fewer available workers to support economic and societal needs. If you’ve read Stack’s bestselling management book, The Great Game of Business, you might guess that in such conditions, he’d call for diversification, and you’d be right. That’s where the $100 million plan comes in. While SRC has diversified through strategic partnerships in the past, this plan allows for new moves into commercial real estate, along with key expansions of SRC’s core business, manufacturing. Rental income is a good bet, Stack says, even during recessions. People may put off purchasing big-ticket items like cars or boats, but historically, he says they’ve continued to make rent and mortgage payments. With this strategy in mind, a new subsidiary, SRC Realty, is leading the effort to capitalize on existing SRC properties and acquire a few additional ones, all with the goal of creating new revenue streams.

SRC’s Property on East Sunshine

This property was the Regal Beloit manufacturing plant until 2015, when it went up for sale. A potential buyer backed out, and Stack says:

SRC offered 81 percent of the listed price; the seller accepted because SRC could close quickly. The existing structure on the property—a 325,000-square-foot building—became home to four SRC entities: Ceramex, SRC Electrical, Global Recovery Corp. and the Great Game of Business. The deal came with extra acreage, too. In total, it’s 43 acres in a desirable Springfield location, and SRC is ready to develop it.

Over on the north side of the property, SRC Realty will start building storage facilities this spring. It’s a smart investment, Stack says, because storage units provide stable lines of income with limited overhead. Plus, some of those retiring baby boomers may want to 
downsize, so they’ll need secure places to store their things.

North Mulroy Road Property

A couple of decades ago when SRC purchased 75 acres at North Mulroy Road and East Kearney Street, it wasn’t practical to develop. But it was a good buy, and in time, the neighborhood attracted more businesses, including a large FedEx facility across the street from the SRC acreage. Nearby infrastructure improvements happened as well, like the addition of a railroad crossing at the East Kearney intersection. So SRC built a massive, new facility for its logistics division. The first phase, a 162,000-square-foot building, was completed during the summer of 2020. A 150,000-square-foot expansion is expected to complete construction early this year. And construction is currently underway on a 413,000-square-foot warehouse. Stack says the warehouse is on track to finish by December, and it should be an appealing space for a large, commercial tenant that’s seeking loads of square footage and easy access to shipping.

All that construction still leaves 10-15 acres on the northeast corner of the Mulroy property for potential development, and SRC Realty has begun taking inquiries from possible retail and restaurant tenants. With the construction of the SRC facilities, the opportunity for a company in the new warehouse and the FedEx folks working across the street, there should be plenty of customers. Once restaurants move in, Stack says, “Our people are really going to enjoy going somewhere to get something to eat.”